{"id":5192,"date":"2023-10-24T15:29:56","date_gmt":"2023-10-24T15:29:56","guid":{"rendered":"https:\/\/www.factorydata.com\/?p=5192&lang=en"},"modified":"2023-10-24T15:29:56","modified_gmt":"2023-10-24T15:29:56","slug":"demand-dispersion-in-auto-parts","status":"publish","type":"post","link":"https:\/\/www.factorydata.com\/en\/demand-dispersion-in-auto-parts\/","title":{"rendered":"Demand dispersion in auto parts"},"content":{"rendered":"

Did you know that in auto parts distributors, 50% of the products<\/strong> their customers ask for represent less than 5% of total demand<\/strong>?<\/h4>\n

The fact about the great concentration of demand in a few products<\/strong> is not new, but we must reflect on the great impact it has from the point of view of the variety of product range that they would need if they wanted to offer perfect customer service<\/strong>.<\/h4>\n

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Actually, in practice, it is impossible to have all these products that are requested, on the one hand because it does not make any sense to incorporate this large volume of products with such low turnover on the shelves<\/strong>, and on the other hand, because the investment required is not much less profitable<\/strong>.<\/h4>\n

So, what should they do with these products that have such little demand?<\/strong> Basically there are 3 options:<\/h4>\n
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  1. \n

    Always have them in stock<\/strong>, which we have seen does not make sense<\/strong>.<\/h4>\n<\/li>\n
  2. \n

    Never have them in stock<\/strong>, which would produce a significant decrease in the level of customer service<\/strong>.<\/h4>\n<\/li>\n
  3. \n

    Analyze them one by one and decide whether or not they should be in stock<\/strong>.<\/h4>\n<\/li>\n<\/ol>\n

    Of course, option 3 is the best<\/strong>, which requires analyzing thousands of products individually and periodically (in order to review the decisions made over time).<\/h4>\n

    This individual analysis of each product<\/strong> should include some, if not all, of the following parameters<\/strong>:<\/h4>\n